Optimism rising among hospitality leaders
The quarterly poll showed more than half (54%) of leaders feel optimistic about business prospects over the next 12 months – a hike of 7% from the January survey, and more than double the number (22%) who feel pessimistic.
The proportion of leaders feeling confident about the eating and drinking out market in general has risen even more sharply quarter-on-quarter to 40%.
Karl Chessell, CGA by NIQ director of hospitality operators and food EMEA, said the figures highlighted the impressive resilience of pubs, bars and restaurants, despite the challenges of Covid and the cost-of-living crisis.
Confidence is key
He continued: “All our research shows consumers remain eager to eat and drink out when they can, and business leaders are rightly confident about the long-term outlook for hospitality.
“Nevertheless, the relentless rise in bills for businesses and consumers alike leaves many firms and jobs extremely vulnerable. Until inflation finally eases conditions will remain very difficult, and hospitality deserves targeted government support to mitigate costs.”
Leaders remain more optimistic than the independent market, where confidence in general (23%) and their own business (33%) are lower, influenced by lower profits and higher rates of closure.
However, all figures remain below the levels seen before the pandemic, and the Business Confidence Survey reveals the ongoing impact of inflation on hospitality.
Encouraging data
Fourth EMEA managing director Sebastien Sepierre said: “It’s encouraging to see business confidence rise across the sector in recent months, despite soaring product costs, labour shortages, and sky-high energy bills continuing to ravage the sector.
“It’s crucial that businesses are getting access to as much support as they can get and are utilising the right tools and technology to help them operate as efficiently as possible, giving sector businesses full control and oversight of their spending across labour and supply.”
A quarter (25%) of leaders said their business operated at a loss in the first quarter of 2023, while 32% said their profitability was below last year’s levels.
There are also signs that some businesses that were weakened by Covid are still at risk. More than a quarter (28%) of leaders said they now had less than three months’ worth of cash reserves, and one in seven (14%) said their business was at risk of failure in the next 12 months – a figure that is unchanged from the January survey.
